Levin Statement on Bipartisan Trans-Pacific Partnership Currency Manipulation Letter
WASHINGTON – Ways and Means Committee Ranking Member Sander Levin (D-MI) issued the following statement on the letter sent to President Obama by 230 House members to insist on new rules against currency manipulation be included in the Trans-Pacific Partnership (TPP) negotiations. Last year, the Currency Reform for Fair Trade Act (H.R. 1276) garnered 234 co-sponsors after an almost identical bill passed with broad bipartisan support (348-79) in 2010. Ranking Member Levin co-introduced the legislation again in March, with 100 co-sponsors.
“With this letter, a majority of the U.S. House has sent a clear message that there is no point in negotiating a TPP agreement to eliminate import duties if countries are allowed to effectively reimpose those duties by manipulating their currencies, even before the ink is dry on the agreement text,” said Ranking Member Levin. “We must proceed on multiple fronts, through legislation and trade agreements, with the ultimate goal of an enforceable, global agreement on currency.”
The IMF currently has clear rules on currency manipulation but no effective enforcement mechanism. The WTO has a strong enforcement mechanism but not everyone agrees on what the WTO currency rules mean. In the TPP negotiations, the Administration must insist that the agreement combine clear rules -- based on existing guidelines that all countries have already accepted through the IMF – with strong enforcement.
The full text of the letter sent to President Obama today can be found below and online:
June 6, 2013
President Barack Obama
The White House
Washington, D.C. 20500
Dear President Obama:
As the United States continues to negotiate the Trans-Pacific Partnership, it is imperative that the agreement address currency manipulation. Exchange rates strongly influence trade flows, and, in recent years, currency manipulation has contributed to the U.S. trade deficit and cost us American jobs. Incorporating currency provisions in the agreement will strengthen our ability to combat these unfair trade practices and help to create a level playing field for American workers, businesses, and farmers.
Undervalued exchange rates allow other countries to boost exports of their products and to impede exports of ours. They also contribute to trade imbalances and market access limitations that make it difficult for U.S. companies to compete in foreign countries. According to the Peterson Institute for International Economics, a minimum of one million American jobs have been shipped overseas as a result of currency manipulation alone. The consequences are not singular to the U.S.; misaligned currencies are distorting the entire global economy.
Despite U.S. efforts to address currency manipulation at the G-20, major currencies remain significantly undervalued. Including currency disciplines in the TPP is consistent with and will bolster our ongoing efforts to respond to these trade-distorting policies. It will also raise TPP to the 21st century agreement standard set by the Administration. More importantly, it will create a level playing field for American businesses and workers and prevent more U.S. jobs from being shipped overseas.
Thank you for your consideration of this letter. We look forward to working with you to address undervalued exchange rates in the TPP agreement.